š CCData report: The Federal Reserveās interest rate cut may affect stablecoin income, with losses expected to be as high as $1.5625 billion!
According to CCDataās latest report on September 27, the Federal Reserveās first interest rate cut since March 2020 may have a significant impact on the revenue stream of centralized stablecoins.
The report shows that U.S. Treasuries account for 80.2% of reserves held by major stablecoins.
Currently, these stablecoins hold a total of nearly $125 billion in U.S. Treasury bonds, which means that each 50 basis point interest rate cut could result in a loss of approximately $625 million in interest income.
The market expects interest rates to be cut by a total of 75 basis points by the end of 2024, which could cause stablecoins to face additional revenue losses of up to $937.5 million. It is expected that the total potential losses caused by the Fed's easing policy will reach 1.5625 billion US dollars.
Among them, Tether's USDT and Circle's USDC are the most affected stablecoins, holding US Treasury bond reserves of up to US$93.2 billion and US$28.7 billion respectively. Other stablecoins such as FDUSD, PYUSD and TUSD have smaller treasury bond positions, but will also be affected by interest rate cuts to varying degrees.
The report also noted that despite potential financial challenges, the stablecoin market showed resilience, with total market capitalization increasing by 1.50% in September to $172 billion, marking the 12th consecutive month of growth.
š¤ Conclusion:
In summary, the Fed's interest rate cuts may have an impact on stablecoins that rely on interest income to maintain value stability, because interest rate cuts mean that the interest income they receive will be reduced.
Facing the challenge of potential interest rate cuts, stablecoins may need to find new sources of income or adjust strategies, such as asset diversification or exploring other income channels, to maintain their stability and market competitiveness.
š¬ Finally, do you think the Federal Reserveās decision to cut interest rates will affect the continued growth trend of the stablecoin market? How should stablecoins respond to potential financial challenges in the current economic climate?
